By Chris O’Malley

Southern Co. and three Missouri utilities say that MISO has billed them more than $21 million in excessive transmission rates since Entergy joined the RTO in December 2013.

In a complaint filed Wednesday with the Federal Energy Regulatory Commission, the companies accuse MISO of imposing a “massive and unlawful increase” for power moved over the Entergy system (EL15-66).

It alleges MISO shifted and reallocated sunk costs and network upgrade costs from its legacy region in the Midwest to Entergy export customers in the South. The companies allege the allocations violate MISO’s Tariff and FERC findings that — with the exception of certain multi-value projects — point-to-point export services are provided under a no-cost-sharing rule.

Bringing the complaint are Kansas City Power & Light’s Greater Missouri Operations Co., The Empire District Electric Co., Associated Electric Cooperative Inc. (AECI) and five Southern Co. affiliates: Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Southern Power.

MISO spokesman Andy Schonert said that FERC is already litigating these issues in docket EL14-19, a section 206 proceeding it initiated in February 2014. “These claims are not new,” he said. “We are reviewing the legal arguments and plan on responding.”

FERC began that case to investigate MISO’s proposed regional “through and out” rate. AECI complained that most legacy customers would be charged a zonal rate based on the facilities in their zone. Thus, the co-op argued, it and other customers would be forced to pay rates based on both the MISO and Entergy footprints after the Entergy integration into MISO.

The case was consolidated with others involving challenges by stakeholders in the South over what Entergy should be able to collect in rates as part of MISO. Many of those disputes have been under settlement talks over the last two years. Last week, FERC terminated settlement procedures and set the matter for hearing.

‘First of its Kind’

At the heart of the new complaint is the no-cost-sharing provision in MISO’s Tariff that, according to plaintiffs, acknowledges the historical lack of coordinated planning between MISO’s legacy region and the newly added Entergy region.

With no basis to conclude that customers of one region benefit from projects planned and constructed to benefit customers of the other region, the Tariff provides that any system-wide rate or cost allocation under the Tariff “shall be limited to the planning area where the project terminates,” the complaint states.

Because FERC noted that Entergy’s integration into MISO as the “first of its kind,” the commission justified the separation of the MISO footprint into two distinct regions for cost allocation and rate design purposes, the utilities say.

They asked FERC to force MISO to modify rate schedules in the Tariff related to export service and to ensure that the no-cost-sharing rule be applied to exports from the Entergy region.

The complainants said they were customers of Entergy prior to its MISO integration and hold long-term, point-to-point transmission service contracts with the company.

Charges for long-term, point-to-point transmission service under Entergy’s Open Access Tariff have jumped from $1.78/kW-month to $3.33/kW-month — an 87% increase — since Entergy joined MISO, they said.

“This massive rate increase should never have happened. It was and remains unauthorized,” the utilities said.

Increases Detailed

The utilities say much of the transmission is used to move wind generation from the Southwest to the Southeast.

When Entergy joined MISO, “it essentially became a continental divide stretching from the nation’s northern border to [the] southern border — with MISO as the gatekeeper for the delivery of Western wind to Southeastern loads and delivery of low-cost Southeastern base-load generation to Western loads,” the complaint states.

Southern said it has paid $8 million more in transmission fees between December 2013 and April 2015.

KCP&L said it paid Entergy $6 million a year for point-to-point transmission service prior to MISO but that the amount has nearly doubled since then.

AECI said it is paying $8.3 million a year, up 94% since Entergy joined MISO.

Empire District, based in Joplin, Mo., said only that its total costs for point-to-point transmission service on Entergy’s system have doubled.